/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/010110.mbx T R O U B L E D C O M P A N Y R E P O R T E R E U R O P E Wednesday, January 10, 2001, Vol. 2, No. 7 Headlines B E L G I U M LERNOUT & HAUSPIE: Bankruptcy Hearing LERNOUT & HAUSPIE: Court To Grant Suspension of Payment C Z E C H R E P U B L I C INVESTICNI A POSTOVNI: Bad Loans Reach 75 Percent F R A N C E BULL: Sale of Non-Core Assets G E R M A N Y EM.TV: Shares Plummet to Two-year Low EM.TV: Talks With Kirch Still On FOOL.DE: German Unit Close INTERSHOP COMMUNICATIONS: Projects Fourth Quarter Losses PHILIPP HOLZMANN: Court Hears Investor's Lament H U N G A R Y MALEV AIRLINES: Privatization Talks Fail N E T H E R L A N D S LETSBUYIT.COM: Closure At Hand U N I T E D K I N G D O M BREATHE.COM: GUS is New Owner CORUS: Labor Unions Prepare for Llanwern Closure CORUS: Llanwern Plant Continues Operations EQUITABLE LIFE: Buyers Want Liability Cap HUNTINGDON LIFE: Seeking Debt Extension MILLENIUM DOME: Blair Defends Legacy Bid MONOGATE LTD: Liquidation Proceedings N W FORD: Liquidation Proceedings NETIX COMPUTR: Liquidation Proceedings RICHARD DUFFICY: Liquidation Proceedings RODE HOLDINGS: Liquidation Proceedings SALLY UK: Liquidation Proceedings TWOFIVETHREE LTD: Liquidation Proceedings ============= B E L G I U M ============= LERNOUT & HAUSPIE: Bankruptcy Hearing -------------------------------------- The commercial court in Ypres (Ieper) has ordered that Lernout and Hauspie's bankruptcy hearing be in camera. The court made the call amid rumors linking the Belgian speech recognition company with the secret service. L'Echo cited a De Standaard report over the weekend that alleged that Stephan Bodenkamp, the founder of three Language Development Companies (LDC) -- Farsi, Bahassa and Slavic Development Cy -- and whose real name is Christof Kionowski, had links with the German secret services. Bodenkamp was fined the equivalent of BFr 270,000 by a Munich court for falsifying a contract relating to a company called MeVisto taking over software developed by German company Polygenesys. LERNOUT & HAUSPIE: Court To Grant Suspension of Payment -------------------------------------------------------- Court chairman Michel Handschoewerker of the commercial court in Ypres will grant Lernout & Hauspie (L&H) a suspension of payments, according to De Standaard & World Reporter. The court will probably put the company under strict supervision and favor a suspension of payments leading to the active liquidation of the Belgian speech technology group. Deminor, which represents the minority shareholders, has strongly insisted on a suspension of payments. Only a few sources expect the court chairman to declare the company insolvent. =========================== C Z E C H R E P U B L I C ============================ INVESTICNI A POSTOVNI: Bad Loans Reach 75 Percent ------------------------------------------------- An audit into IPB's Kc166 billion loan portfolio shows that 75 percent of it is non-performing. The Czech Finance Ministry made the figures available to the Prague Business Journal last Wednesday -- in contrast with IPB's claim that bad loans total only 25 percent. Belgian financial services group KBC took over Investicni a Postovni Banka (IPB) last June after IPB was put into forced administration by the central bank. KBC's Czech unit Ceskoslovenska Obchodni Banka (CSOB) now controls the bank's assets and has the authority to transfer some of them to the government. Officials declined to comment on the amount likely to be transferred to the government, but analysts estimate it to be up to Kc 160 billion. Nomura securities and its affiliates, which own 46 percent of the bank, also demand a share of the bank's assets. By the end of 1999, IPB had Kc 164 billion in outstanding corporate loans and primary deposits of Kc 244 billion. Data from the Czech National Bank reveal that IPB granted loans mainly to manufacturing and trading companies. The bank has a 15 percent share of total loans in the country. =========== F R A N C E =========== BULL: Sale of Non-Core Assets ------------------------------ The French IT-service firm Bull is trying to raise cash by selling its non-core assets. Bull is selling CP8, its smart card unit, to Schlumberger for Euros 400 milion. According to the Tornado Insider, smart cards is one of the few areas of high growth in this environment of scaled-back IT spending. But Bull must sell because the unit requires heavy cash resources, it added. Bull revenues have fallen steadily since 1997 and last year's debt (ex cash) was double that of 1999. Reorganization costs and poor operational performance are taking their toll on the firm's cash resources. Bull is funding working capital and re-skilling costs by channeling retained earnings and raising high levels of short-term debt -- the servicing of which could increase the chances of defaulting. If this trend continues, analysts believe Bull could be on its way to negative shareholders' equity. Faced with this scenario, the company plans to operate four units, with servers and services separated out. This move however is not guaranteed to eliminate difficulties in these areas. Bull profits from ERP (enterprise resources planning) services, infrastructure integration and mainframe maintenance have been stagnant to declining despite the upswing in the services market. Bull reduced its workforce by 1,775 employees in 1999 and a further reduction of 1,800 employees, or 10 percent, was implemented in 2000. More layoffs are expected but analysts believe these will only create short-term savings. Twenty-five percent of the shares outstanding are in free float and its shareholders favor Bull seeking a buyer. Two of Bull's major shareholders, France Telecom (17.4 percent) and the French government (17.3 percent), are reportedly not in a hurry to sell. ============= G E R M A N Y ============= EM.TV: Shares Plummet to Two-year Low -------------------------------------- E.M.TV. shares fell to a two-year low after news that Kirch is abandoning its plan to acquire the German Media group. According to Kagan World Media, EM.TV shares fell to Euro4.03 in early trading, down 28 percent from Thursday's close. This value is 97 percent lower than its all-time high of Euro120 in February 2000. Wright Investors' Service Profile reveals that by the end of 1999, EM.TV & Merchandising AG have a negative working capital. Liabilities amount to Euro197.00 million while total current assets stand at Euro139.35 million. EM.TV: Talks With Kirch Still On --------------------------------- Amid reports claiming the opposite, EM.TV insists that talks with media giant Kirch are still on. EM.TV was quoted by the Times as saying the talks were progressing "in a normal way." It denied rumors that the negotiations with its Munich neighbor ended in a stalemate. If it pushes through, the deal will lead to Kirch's acquisition of more than 16 percent in EM.TV and taking half its holdings in Formula One. FOOL.DE: German Unit Close --------------------------- The German site of the U.S.-based company The Motley Fool has been closed down after only one year of operation. In its January 5 issue, The Net Imperative said the closure was triggered by the subsidiary's failure to generate short-term revenue. The unit was also short of partners. A statement from the company cited an "increasingly difficult economic climate" and the failure to form a strong joint venture partnership. The closure has triggered speculation about the fate of its UK division. The Motley Fool said that the company does not rely on advertising alone. It is also into publishing and selling industry reports. Phil Southgate of The Motley Fool said, "the UK site is doing very well. We have 250,000 unique users every month." INTERSHOP COMMUNICATIONS: Projects Fourth Quarter Losses --------------------------------------------------------- Germany's Intershop Communications has revealed its fourth quarter projections to the Tornado Insider. The company said it forecasts a net loss of Euros30-32 million versus sales of Euros28-30 million. Analysts previously projected Intershop's revenues for the same quarter at Euros43-46 million and net losses between Euros4.5-8 million. As of December 1999, Wright Investors Service shows the company's total liabilities (i.e., all monies owed) at Euros30.93 million. Its long-term debt to equity ratio is very low, at 0.00. PHILIPP HOLZMANN: Court Hears Investor's Lament ------------------------------------------------ A German court will hear on February 23 the case Gevaert filed against Deutsche Bank and Philipp Holzmann AG. Belgian holding company Gevaert filed the case after alleging that Deutsche Bank failed to inform it on the risks of investing in Holzmann. Holzmann suffered losses of up to 2.4 billion marks in November 1999. Gevaert purchased 30 percent of Holzmann from Deutsche Bank and construction firm Hochtief, and last year wrote down over 80 percent of its stake. Gevaert's stake in Holzmann fell to less than 15 percent early last year due to its non-subscription of Holzmann's capital increase. Reuters reports that Gevaert's legal claim is limited to an amount less than that of the firm's insurance coverage. ============= H U N G A R Y ============= MALEV AIRLINES: Privatization Talks Fail ----------------------------------------- In a report made available to the Napi Gazdasag economic daily newspaper on Monday, the Hungarian state privatization agency APV Rt said that all seven potential investors planning to acquire Malev Airlines have backed out of the deal. Agence France Presse reports that the Hungarian government has offered a stake of up to 46.8 percent in the airline, and four investors have expressed serious interest: Lufthansa, Air France, British Airways (BA) and KLM. However, British Airways backed out of the talks even before the announcement. Experts blame the lack of interest to general uncertainty in the international air industry. Also, air alliances tend to make small airlines unprofitable. ===================== N E T H E R L A N D S ===================== LETSBUYIT.COM: Closure At Hand ------------------------------- Letsbuyit.com has been closed to new orders for the past few days and callers to its London office are greeted with recorded messages. A spokesman for the e-tailer could not be reached, and consultants advising the debt-laden company said responsibility for communications had been handed over to the Dutch trustees of Letsbuyit's debt moratorium. The Scotsman said company shares traded poorly for the past week but rose 20 percent higher when news of the mass resignation of the firm's top management hit the wires. John Palmer, Letsbuyit's founder and member of the supervisory board, now acts as temporary chief executive. He and the two court-appointed administrators, Paul Schaink and Maarten Drop from Dutch law firm Trenite van Doorne, act as management. =========================== U N I T E D K I N G D O M =========================== BREATHE.COM: GUS is New Owner ----------------------------- Great Universal Stores (GUS) has purchased Internet company Breathe.com for pounds 104 million. GUS finance director David Tyler called it a "very important acquisition." According to the Times, GUS bought Breathe.com for its technology, skilled staff and hardware and plans to incorporate it to Gusco.com, its recently established Web development unit. Although losses are expected to increase, GUS said it has no plans to shut down the portal; it later decided to retain about 80 of Breathe.com's 140 employees at the cost of pounds 70 million. Breathe.com closed down last December with losses of about pounds 20 million and debts of up to pounds 35 million. CORUS: Labor Unions Prepare for Llanwern Closure ------------------------------------------------- Corus told unions over the weekend that they should prepare for the closure of the steel plant in Llanwern, South Wales. The closure is a blow to the 3,000 workers, unions and local MPs who lobbied against the plant's shutdown. The UK-Dutch steel maker announced last month that a major restructuring of its UK operations is under way. BBC News said union leaders want assurances that the job losses will not involve compulsory redundancies. Michael Leahy, general secretary of the Iron & Steel Trades Confederation said: "We have made our position quite clear to Corus. Unless they respond positively, we will be in a very serious situation." CORUS: Llanwern Plant Continues Operations ------------------------------------------- After expecting full closure of the Llanwern plant, union members have welcomed an announcement by Corus that it will focus its new capacity cutting on Llanwern. It will remove the iron and steelmaking facilities but will retain some milling operations. The announcement was made after a meeting between Corus officials and labor leaders over the current round of redundancies. The Times said yesterday that union optimism was high over the retention of some activity in Llanwern but no exact number is available as to how many jobs will be kept. The Times adds that unions have decided to put to the ballot the issue of compulsory redundancies. Due to this development, Corus may still face the threat of industrial action. The plant at Scunthorpe will hold a ballot and workers at Teesside will meet to decide whether a weekend mass meeting is possible. Allan Johnston, Corus's personnel director said he hoped industrial action could be avoided. He said: "The meeting addressed in a frank manner the urgent requirement for Corus to seek improvements in all aspects of its UK operations." Corus plans to disclose to the unions details of its restructuring plan by the end of January. EQUITABLE LIFE: Buyers Want Liability Cap ------------------------------------------ Bidders for Equitable Life want a limit of the firm's liability to its policyholders. According to the Electronic Telegraph, Equitable is in talks with members of the Equitable Life Action Group and the National Association of Pension Funds this week. The firm is reportedly seeking a compromise from holders of guaranteed annuity rate options (GARs) and people in additional voluntary contribution (AVC) schemes. "Finding a way to cap the liabilities of Equitable Life is vital. A compromise by GAR holders has got to be applicable to people in AVC schemes as well, so we are talking to the NAPF. After the talks, Equitable will have to go away and price up the ideas we have," said Stuart Bayliss of Annuity Direct. In December, talks with Prudential Life fell through. It was revealed that Equitable prefers to be sold as a whole entity; however, sale of its asset management arm, sales force, and third-party administration division continues. HUNTINGDON LIFE: Seeking Debt Extension ---------------------------------------- In an effort to restructure its debts, drug-testing group Huntingdon Life Sciences (HLS) is seeking its fourth debt extension from bankers, BBC News said. The firm announced on Monday that it is asking lenders for more time to pay its pounds 22 million in obligations. HLS has been granted three extensions in the past: 30 November, 5 January, and until 19 January 2001. In August, the company announced an agreement with a US private equity firm, FHP Realty to cover its debt with creditor banks. BBC adds that HLS may lose its New York Stock Exchange listing due to the poor performance of its shares. MILLENIUM DOME: Blair Defends Legacy Bid ----------------------------------------- Prime Minister Tony Blair defended the government's selection of the Legacy group as the preferred bidder for the Millenium Dome. He rejected hints that Legacy was selected because Legacy chief Robert Bourne had made donations to the ruling party. Speaking on BBC news last Sunday, Blair said that the pounds 125 million bid was first turned down. Bourne recently made the final installment of the 100,000-pound gift promised to the Labour Party prompting Opposition Conservatives to question the timing of the donation -- around the time when the first choice to take over the Dome backed out. Blair has dismissed these accusations. Reuters quoted Blair as saying: "This whole business that somehow we've given the Dome to Legacy because this guy once contributed to the Labour party...is nonsense." Lord Falconer, the Minister of the Dome, told Sky television that Bourne pledged the donations to the Labour Party three years ago. "That has absolutely nothing whatsoever to do with the arrangements in respect to the Dome," Falconer said. He added that if Legacy's bid does not come through, then the door would be open to other interested parties. The Dome's chief executive, Pierre-Yves Gerbeau, has repeatedly said that he would like to buy the Dome and run it as a visitor attraction. MONOGATE LTD: Liquidation Proceedings -------------------------------------- Company Name: Monogate Ltd Previous Name: Molloy Homes Ltd Company No: 2996911 Com. Business: Dormant Co Appointed on: 27/11/00 Type: Creditors Appointed by: Creditors and Members Liquidators: Stephen L Conn IPno: 1762 Firm Name: Stephen Conn & Co Address: 17 St Anns Square City Postcode: Manchster M2 7PW N W FORD: Liquidation Proceedings ---------------------------------- Company Name: N W Ford Ltd Previous Name: Nigel Ford Ltd Company No: 3642585 Appointed on: 27/11/00 Type: Creditors Appointed by: Creditors and Members Liquidators: A J Findlay IPno: 8744 Firm Name: Findlay James Address: 27 Colmore Row City Postcode: Birmingham B3 3EW NETIX COMPUTR: Liquidation Proceedings --------------------------------------- Company Name: Netix Computer & Communications Ltd Company No: 2885962 Com. Business: Retail Computer Hardware/Software Appointed on: 27/11/00 Type: Creditors Appointed by: Creditors and Members Liquidators: E Arkin IPno: 5408 Firm Name: Arkin & Co Address: 23 Turnpike Lane City Postcode: London N8 0EP RICHARD DUFFICY: Liquidation Proceedings ----------------------------------------- Company Name: Richard Dufficy Ltd Company No: IR Appointed on: 27/11/00 Type: Members Appointed by: Members Liquidators: Tom Caulfield Firm Name: O'Donovan Caulfield Lavin Address: 1 Mount Kennett Place Henry Street City Postcode: Limerick RODE HOLDINGS: Liquidation Proceedings --------------------------------------- Company Name: Rode Holdings Ltd Company No: IR Appointed on: 27/11/00 Type: Members Appointed by: Members Liquidators: Barry M Forrest Firm Name: O'Connor Leddy & Holmes Address: Century House Harolds Cross Road City Postcode: Dublin 6 SALLY UK: Liquidation Proceedings ---------------------------------- Company Name: Sally UK Holdings Plc Company No: 1696181 Com. Business: Holding Co Appointed on: 27/11/00 Type: Members Appointed by: Members Liquidators: Nigel J Hamilton-Smith IPno: 2093 Firm Name: Morton Thornton & Co Address: Torrington House 47 Holywell Hill City Postcode: St Albans AL1 1HD TWOFIVETHREE LTD: Liquidation Proceedings ------------------------------------------ Company Name: Twofivethree Ltd Previous Name: Leyland Parts Ltd Company No: 2986253 Com. Business: Dormant Appointed on: 27/11/00 Type: Members Appointed by: Members Liquidators: Donald P Gendall IPno: 8615 Derrick A Smith 5022 Firm Name: Oury Clark Address: Cippneham Court Cippneham Lane City Postcode: Slough SL1 5AT S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter -- Europe is a daily newsletter co- published by Bankruptcy Creditors' Service, Inc., Trenton, NJ USA, and Beard Group, Inc., Washington, DC USA. Lexy Mueller, Jessie Elumba and Cristina Pernites, Editors. Copyright 2001. All rights reserved. ISSN 1529-2754. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR Europe subscription rate is $575 per half-year, delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 301/951-6400. * * * End of Transmission * * *